We have demonstrated that a cyclic dipeptide Cyclo (his-pro) plus zinc (Cyclo-Z) treatment improved clinical conditions of diabetes in various animal models and a phase 1 clinical trial. The main objective of this study is to demonstrate that this product is safe and effective for the treatment of human diabetes. Research Plan This is a randomized, double blinded, placebo-controlled, and parallel study. In this study, we will recruit 120 hypoglycemic drug naove type 2 diabetic patients and randomize them into 4 groups of 30 subjects each to compare the effects of a Cyclo-Z capsule containing CHP 0 (placebo), 3 mg (minimally effective), 9 mg (optimally effective), or 15 mg (no-additional effect) plus 20 mg zinc on diabetic symptoms in a 12-week trial period. The primary outcome of this study is improvement of hemoglubin A1c;secondary outcomes are fasting blood glucose, 2 hours postprandial glucose and glucose tolerance test. Safety will be assessed by the presence of severe adverse events (SAEs), adverse events (AEs), any changes of vital signs, physical exams, blood hematology, chemistry, liver, renal, thyroid function tests, urine analysis and zinc, copper levels. PUBLIC HEALTH RELEVANCE: Relevance to the Veterans Health Diabetes is a difficult and challenging chronic disease, and the seventh leading cause of death in the US (61). The DVA provides healthcare service to about 5.0 million patients throughout the country in 163 medical centers, and diabetes has high prevalence in VA patients. In the year 2000, 19.6% of VA patients had diabetes and this percentage increases annually by 2 % (61). Hence, the diabetic population among VA patients may approach 30% in the year 2008. About 30 % of pharmacy prescriptions of the VA Medical Centers are received by diabetic patients (62) and overall 23 % of pharmacy expenditures were related to patients'glycemic control in the year 2000. The expenditure for the outpatient visits was $214.8 million and inpatient expenditure was $1.45 billion in 1998 (63). Cyclo-Z may pose a benefit to more than 30% of veteran population. This new drug may ameliorate diabetes and reduce insulin-resistance which would greatly reduce the cost of inpatient and outpatient medical service as well as pharmacy expenditure. Three different patents with Cyclo-Z for the treatment of diabetes, obesity and Alzheimer's disease are now owned by the DVA and the phase 1 clinical trial has been completeds with favorable result. The outcome of the proposed phase 2a clinical trial will lead to an agreement with a major drug company by the DVA for Cyclo-Z marketing. We believe that Cyclo-Z will be effective and safe in the prevention and treatment of diabetes and that this novel drug will be beneficial to the health of many diabetic veteran patients.